Jan. 15 Democratic debate transcript

Russert: Senator Clinton, you voted for the same 2001 bankruptcy bill that Senator Edwards just said he was wrong about. After you did that, the Consumer Federation of America said that your reversal on that bill, voting for it, was the death knell for the opponents of the bill. Do you regret that vote?

Sen. Clinton:  Sure I do, but it never became law, as you know. It got tied up. It was a bill that had some things I agreed with and other things I didn't agree with, and I was happy that it never became law. I opposed the 2005 bill as well.

But let's talk about where we are now with bankruptcy. We need urgently to have bankruptcy reform in order to get the kind of options available for homeowners. In addition to what I want to do, which is the moratorium on foreclosures for 90 days to see what we can do to work them out, and freezing interest rates for five years, and making the mortgage industry more transparent so we actually know what they're doing.

I mean, look what happened with Countrywide. You know, Countrywide gets bought and the CEO, who was one of the architects of this whole subprime mess, is set off with $100 million -- $100 million in severance pay.

You know, the priorities and the values are absolutely wrong. So, what we've got to do is move urgently.
In addition to what I proposed, I think we've got to reform the bankruptcy law right now, going forward, so that people who are caught in these subprime and now increasingly conventional loans that they can't pay because of the way the interest rates are going up and many of the fraudulent and predatory practices that got people into them in the first place will have the option of getting relieved of this debt.

So there's a lot we need to do right now. And, you know, I want to just add that the groups that sponsored this are primarily black and brown groups that care deeply about these issues.

Everything we're talking about falls disproportionately on African Americans, on Hispanics, on a lot of Asian Americans.

Here in Nevada, the African-American and Hispanic communities are really the ones that are most victimized by these sub- prime mortgages. They're the ones who are often the first to be let go when the economy begins to slide. You know, in and out of the homes that I have visited, and here in Las Vegas, those are the stories that I am hearing.

So we need to move urgently. We have a lot of big agenda items that I agree with John on: universal health care, college affordability. But we can't wait. We're going to lose another, you know, million Americans in home foreclosures.

We're going to see a deteriorating community across America because homes will be left vacant. The housing market is down. Nobody will buy those homes. Housing wealth, which the principle source of American middle class wealth, is now decreasing.

So I have a real sense of urgency.
We need to be acting now. And I know that the Democratic Congress, under Senator Harry Reid and Speaker Pelosi, are going to do everything they can to address this.

Russert: Senator Obama, the 2001 bankruptcy bill; the 2005 bankruptcy bill?

Sen. Obama:  I opposed them both. I think they were a bad ideas. Because they were pushed by the credit card companies. They were pushed by the mortgage companies. And they put the interests of those banks and financial institutions ahead of the interests of the American people.

And this is typical. Now, Hillary's exactly right that we've got to modify some of the fraudulent practices, predatory lending practices.

I put in a bill, a year and a half ago, to make that happen. Because it does affect communities, including my own, on the south side of Chicago.

But, unless we are able to rid the influence of special-interest lobbies in Washington, we're going to continue to see bad legislation like that.

And that's why we're going to have to change how politics is done in Washington.
Now, we have an immediate problem. I met with a number of folks up in Reno, just two days ago, who are already seeing their homes being foreclosed upon.

One of the things that we have to do is we have to release people who are in bankruptcy as a consequence of health care; we've got to give them a break.

One woman who I was with, her husband is a police officer. He contracted cancer, went through chemotherapy, ends up being hit by a car while in the line of duty, and they fall three, four months behind on their health care payments, and that's it, they can't make the payments on their house.

We've got to provide them some relief. I've put forward a $10 billion housing fund that can help bridge people who have been responsible in making their payments. They're not speculators, they're not trying to flip properties. They're in their own homes.

We've got to make sure that they can get the kinds of help that they need to stay in their homes and make the payments and live out the American dream that is so important to so many people.